Buy Low Cost Flat or Medium Cost Condo as First House for Own Stay

Hi Horlic, may I ask for your opinion – I’m a fresh graduate earning about RM3,000/mth. Currently, I’m renting a room at RM450/mth.

I think of owning my first house for own stay instead of continue to rent. But, I dare not go for property more than RM100,000 as I afraid could not afford the heavy commitment thereafter.

Therefore, I plan to go for a second hand low cost flat around RM50,000 in Cheras area, and target to settle the housing loan within 8 to 10 years.

Should I go for second hand low cost apartment or medium cost condo about RM250,000 and serve the loan for 25 to 30 years, please? Thank you very much! From: Chris

If I’m in your shoes, I do not mind to buy low cost flat as my first house for own stay, as long as the living environment is acceptable and feel comfortable to stay there, then why not?

Reasons being are:

  • Monthly loan installment for RM50K is much lesser compare to your room’s rental at RM450/month. It helps you to save hundred dollars every month after all.
  • Besides, you may rent out other rooms to further reduce your burden. In another word, it saves you more money.
  • RM50K compare to RM250K, low entry costs meaning lower risk. Perhaps you may want to spend more time to learn and build your foundation first before going for higher value properties?

Thank You.

Best Regards,
Horlic Lim

16 thoughts on “Buy Low Cost Flat or Medium Cost Condo as First House for Own Stay”

  1. simon

    income above 3k cant purchase low cost flat.
    the max income for eligibility to purchase a low cost flat is 1.5k.

  2. Peter Yee

    Dear Chris, your income of 3k deter you from buying low cost flat from primary and secondary market but you can buy it from auction market.
    Your monthly rental of RM450 and income of 3k implied that you are a young professional, the low cost flat’s environmental and neighborhood may not suitable for you.
    You may consider medium cost 3R2B apartment of 1R1B studio condominium price about RM70k to RM150k. Stretch your loan as long as possible to minimize the monthly repayment to less than RM450 with 100% loan. In other word, you will be your own tenant with the similar rental and eventually you will own the property fully. Why worry, just do it!

  3. Chris

    Thanks Horlic & Peter for the valuable reply.

    Horlic, you’re very right. It’s still a long way for me to learn about this interesting market. Wishing us successful investment ahead!

  4. Chris

    Hi Peter,

    Is that any bank offer 100% loan? I thought the max loan is only 90%. Tks ya.

  5. simon

    PKNS sometime tighten the policy. Even you won on auction but you might not getting the flat end of the day. There might have some blockage on the legal issue.

    I heard this before. Usually case by case but why taking the risk?

    primary and secondary also having the same issue.

  6. Peter Yee

    Hi Chris,

    For secondary residential property about RM100k with your monthly income of RM3k.You may raise the S&P price to 110k with the agreement from the seller to get 100% loan.
    That is call no money down deal.
    For primary residential property, it’s easier to get 100% loan.
    For first time buyer, most bank will consider.

  7. Loges

    Hi All,
    I planned to buy a subsale low cost flat at Bangi for RM50k with no money down.

    Valuation report RM55K to RM60K.

    My basic salary RM2500.

    Am i able to get the low cost flat? Please advise. I going to apply for the loan tomorrow 20 Sept.

    Which one i should do first?
    Check with my lawyer and do the S&P first or secure my loan first?

    Please help. Thanks

  8. simon

    Check with your lawyer can they work out for the low cost flat or not.

    secure loan is easy if you dont have bad records.

  9. maya

    Hi all,

    Im fresh graduate with salary RM2.5k with no any commitment yet.

    Im interested in property investment to buy house like u all. However, i dont have any courage to start and only have little knowledge about house investment.

  10. Chris

    Hi Horlic, Peter, Simon,

    I’ve decided to take up an apt at mahkota cheras for 70k.

    My initial plan for this house is for short-term own stay (3-5 yrs) and will rent it out thereafter, without selling it off. This is because Master course fees commitment.

    With more savings thereafter, I may buy a landed house / condo.

    In my case, may you kindly advise me for the loan tenure for my 1st apt, should I take the shortest tenure (about 8-10 years) based on my affordability or should I maximize the tenure to maybe 20 years? Tks.

  11. simon

    Yes you may borrow 70k if it is at the market value. The estimated value for the loan for 20 yrs would be about 550-600.

    You may need to fork out about 5k-10k for legal fee.

    If you need to leave a bit comfortable, you might need to spend another 10-20k for furniture and fixes like wiring and paint. It is worth it before you move in.

  12. Chong Kong Hui

    No money down. Good deal or bad deal?

    You may get the deal with seller BUT how about the valuer?

    Even you get all ok, how about your monthly repayment (higher installment)?

    Even you are ok with that, how about the stamp duty? (higher stamp duty with higher SPA value)

    ok ok… all above does not matter. Why bother do to so since you are not investing for cash flow?

    How long? Preferably 30 years.
    – Term loan is the cheapest finaning
    – You are young
    – Low installment (more cash for other investment)
    – When you rent it out later, will have Positive Cash Flow

  13. lee

    I alreadly have one house. Can I still can buy the low medium property?

  14. gc

    very good question

    very good answer by horlic

    i am in the same situation now

    i will just buy house at 80K

    • Horlic Lim

      gc, I will suggest you to visit few banks and understand the home loan package available for loan below RM100K. In fact, not many banks do home loan below RM100K. Take note!

  15. KahWeng

    want to ask,at the end u bougjt it or still for ppl income lower than 2500?